Middle-east Arab News Opinion | Asharq Al-awsat

China: State-run Steel, Coal Firms to Cut 10 Percent of Capacity - ASHARQ AL-AWSAT English Archive
Select Page

Shanghai-China’s central-government run steel and coal firms will cut capacity by around 10 percent in the coming two years, and by 15 percent by 2020, as part of their efforts to tackle gluts in the sectors, the state asset regulator said on Friday.

The State-Owned Assets Supervision and Administration Commission (SASAC) held a meeting with the 25 coal and steel firms under its jurisdiction at the end of June, it said.

The SASAC-run firms include China’s biggest coal producer, the Shenhua Group, as well as the Baoshan Iron and Steel Group (Baosteel) and the Wuhan Iron and Steel Group, which have recently announced plans to restructure.

China aims to cut 100-150 million tons of annual steel production capacity and 500 million tons of coal production capacity in the next three to five years, amid waning domestic demand and a long decline in prices.

Meanwhile, human resources vice minister Xin Changxing said China should slow down the pace of wage increases in order to maintain competitiveness.

Several Chinese provinces have slowed or halted rises to the minimum wage, as Chinese companies face pressure from rising expenses and weakening demand.

China should encourage labor-intensive factories to move from coastal areas to less developed western provinces, alongside efforts to update industries to spur productivity, he said.

The government is also looking to lower the social benefit cost burden on companies.

Lower wage growth could also help Chinese companies better compete with overseas low-cost centers for export orders.

Despite rising labor costs, China continued to gain global export market share last year.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

More Posts

Follow Me:
FacebookGoogle PlusYouTube